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Friday, 9 December 2016

Alessandro di Battista, deputy of Italy’s
Five Star Movement that helped to defeat the government’s Constitutional reform
proposal in December 2016, has hinted that voters decide a possible exit from
the euro-zone during the next election for prime minister. This may or may not
take place, but Italy remains a possible candidate for exiting the euro. This
hardly comes as a surprise after the referendum revealed a decidedly anti-EU
sentiment amid the banking crisis and economic stagnation the country is
suffering.

Is the EU on the eve of disintegrating, or
can it survive without the United Kingdom and Italy with other countries to follow? Does
it really make much difference if it dissolves, considering that countries will
forge bilateral and multilateral trade, investment, environmental and other
agreements? Is the current EU integration model viable for all its members or
merely for Germany enjoying economic hegemony over the euro-zone?

Shortly after the deep recession that
started with the subprime mortgage bubble in the US in 2008 that eventually
spread around the world, the EU began to transform in significant ways. Just
about everyone was so focused on the immediacy of the recession that there was
no focus on the transformation of the integration model. The integration model
under which the EU was founded changed to reflect the sharp division between
the hegemonic core members led by Germany and France vs. the weaker periphery
ones in Southern and Eastern Europe. Largely because the financial sector
needed to absorb capital otherwise going to the middle classes and workers, the
state became the conduit for altering the integration model by using the common
currency, EU rules on GDP-to-debt ratio as a means of limiting public spending,
loans and subsidies, all as leverage to enforce neoliberal policies and
preserve the hard currency. The result was middle class living standards began
to decline along with the prospects for upward social mobility as reflected in
high youth unemployment, including college graduates, as the Organization for
Economic Cooperation and Development (OECD) noted. https://data.oecd.org/unemp/youth-unemployment-rate.htm

Founded on the inter-dependent integration
model, the EU led by Germany adopted the patron-client model once the great
recession began to impact the banks requiring massive capital injections.
Intended to raise GDP and living standards in the periphery countries that
joined the euro-zone, the inter-dependent integration model was replaced with
the patron-client model on which NAFTA and other US-dominated Inter-American trading
blocs are based. The goal was for the hegemonic country to capture greater market
share under low tariffs and low asset values ranging from labor costs to raw
materials.

Under the aegis of Germany, the EU adopted
the patron-client model in order to remain competitive on a world scale by
transferring capital from the periphery to the core through austerity measures
as well as neoliberal policies. These measures entailed the considerable
downsizing of the public sector that sold public assets to corporations, lower
wages and benefits, deregulated market in everything from pharmacies to
transportation, lower taxes and loopholes for big business while small
businesses found it more difficult to compete because their taxes and costs of
doing business were higher.

Because it imposed on its members budgetary
deficit restraints as part of the neoliberal economic course, the EU forced its
members to eliminate the state as an agent of stimulating growth in the
periphery countries. There are many ironies in all this, but I will only
mention two as glaring examples. First, privatizing public utilities and
selling them off while eliminating public service jobs was self-serving for the
core countries where the private companies were based.

Interestingly enough, France, for example,
that had tried privatizing water, had such a bad experience that it reverted
back to public control, given the issue was both of cost and health. Second, behind
the change in the integration model and neoliberal policies were some of the
most corrupt banks in the world, including Deutsche Bank which is still waiting
to find out the amount of fine imposed by the US Justice Department -
originally $14 billion, but still in negotiations for a reduction. These
multinational corporations driving policy not just in the EU but across the
world and backed by the IMF and World Bank brought immense pressure on the
periphery to adopt austerity measures that further wrecked fragile economies
and made them more vulnerable to foreign economic dominance.

The illegal and fraudulent practices of
banks included not only deceptive practices in residential mortgages and fixing
rates, but money laundering, tax avoidance and terrorism financing, all of
which the EU Commission has admitted drained capital from state treasuries and
undermined the economies. The “Panama Papers” of the law firm Mossack-Fonseca
revealed that major banks including many in the EU were deeply involved in
illegal activities including transferring funds into offshore companies where
money is hidden from tax authority. People are well aware that tax evasion by
the wealthy entails that the tax burden falls disproportionately on the middle
and lower classes. The EU, member governments, and the financial elites expected
the average citizen to bail out the banks in the aftermath of the recession in
2008, never raising the option of fair and shared sacrifice.

Concurrent with the change in integration
models was the very clear and sharp decline in the social welfare state and
rise in corporate welfare and neoliberal policies that transferred income from
small businesses and professionals that make up the middle class. Governments also
launched an assault on labor unions and workers with the goal of exacting concessions
on wages and benefits, diluting collective bargaining and strike laws, and
imposing longer working hours. The argument was that workers were to blame for
the recession because they enjoy generous wages and benefits. By embracing
anti-labor and anti-middle class policies, governments of conservative, centrist,
and Socialist parties across Europe began to lose credibility that the social
contract at the national and regional levels was working for the benefit of all
people. For their part, the EU, member governments and its apologist argued
that downsizing the social welfare state and lowering living standards from the
broader working and middle classes was necessary to remain competitive with
East Asia where wages were low.

Globalization under neo-liberal policies
resulted in a sociopolitical reaction across Europe and polarized the
electorate looking for alternatives to the mainstream parties. However, the
ultra right wing was far more serious in opposing the EU than the non-Communist
left running on reformist platform but invariably co-opted by the neoliberal
establishment. Italy’s referendum defeated by both the reformist left and the
extreme right was the latest example of voters rejecting the government’s anti-labor
neoliberal corporate welfare policies intended to concentrate capital in the
name of ‘saving the ailing banks’ while calling it ‘reform’ as though it is
beneficial for the majority of the people.

Italy’s Referendum and its Symbolic Significance for
the EU

On 4 December 2016, Italian voters dealt a
major symbolic blow to neoliberal-corporate welfare policies that the EU has
been imposing across the continent since the start of the great recession in
2008.Voters rejected Prime Minister
Mateo Renzi’s proposals for a stronger executive and a weaker legislative
branch intended to push through neoliberal and austerity reforms that large
banks and corporations demanded at the expense of smaller businesses, the
middle class, and workers whose living standards have been on a steady decline
since 1994 and accelerated after 2009. In 2006, Prime Minister Silvio
Berlusconi tried a similar reform of the constitution of 1948 but he did not
have any better luck than Renzi ten years later. The goal was a stronger
executive to pass legislation that would benefit big capital within the EU.

With the decline of the middle class came
lower living standards for workers and higher poverty rates, with more young
educated Italians leaving their country for a better job; a process that will
accelerate in the coming years regardless of whether Italy stays or leaves the
EU. Italy is the Euro-zone’s fourth largest economy and the world’s eighth
largest in nominal GDP along with Brazil. Interestingly enough, like Brazil,
Italy has major structural problems. Its rising public debt is at 133% of GDP,
but without the large informal economy estimated at $233 billion in 2014, debt
to GDP ratio is closer to 150%. This is accompanied by unemployment of 11.6
percent, or three times higher than Germany’s but half of what Greece and Spain.
Unlike Greece which has no industrial sector of any consequence and relies
heavily on imports while suffering from unsustainable public debt and high chronic
unemployment and underemployment, Italy has a solid industrial sector that
offers some hope for its massive public debt problem and banking crisis.

To address both the public debt and banking
crisis, Renzi, backed by finance and corporate capitalists as well as the
entire weight of the EU establishment, proposed a corporate welfare scheme to
transfer income from the middle and lower echelons of society to the banks and
corporations. This was intended to keep the banks under private control by injecting
public funds, rather than nationalize them. The prime candidate for nationalization
is Banca Monte dei Paschi that has failed stress tests and it has considerable
international links that could have consequences for the entire banking
industry in Europe. Recapitalization and ridding itself of bad loans required
more time than the ECB was willing to permit the bank to raise an estimated at 5
billion euros.

That the ECB rejected Monte Paschi request
for state bailout just a five days after the referendum meant inevitable losses
for shareholders and bondholders as well as Italian taxpayers. Of course the
prospect for some EU assistance remained a possibility because of the domino
effect fear across the EU. Against this background, if the US Justice
Department imposes a heavy fine ($14 billion) on Deutsche Bank it would mean the
only way to save that bank would be for the German government to bail it out
and that would then set off another round of crises across the EU.

The political attempt to resolve Italy’s
banking crisis suffered a temporary setback because the anti-austerity, anti-EU
Five Star Movement opposed Renzi’s proposals along with the nationalist right
wing xenophobic ‘Lega Nord’ (Northern League). For different reasons, all
political parties opposed Renzi’s constitutional reform proposal, but it was the
populists of the left and the right claiming victory over the neoliberals who
represent international finance capital and the multinational corporations in Italy
and in Europe. It should be kept in mind that former prime minister and
billionaire Silvio Berlusconi, who in 2006 tried the same constitutional reform
tactic as Renzi, sided with the Lega Nord against Renzi. This illustrates that
not all Italian capitalists favored existing EU policies and the integration
model, just as not all British capitalists favored remaining in the EU that they
perceived as German-dominated.

Renzi announced his resignation because it
was a clear defeat of his policies and a resounding rejection of the disastrous
road that southern Europe has been following under the aegis of EU and IMF
since 2010. Nevertheless, in the days after the vote, EU stock markets rose
sharply and the euro did not lose its value as a reserve currency as the
neoliberals had been warning to scare voters into supporting Renzi’s policies. Short-term
stock market speculation aside, the reality of Italy’s GDP growth close to
zero, youth unemployment at 40% right behind Spain and Greece, and an economy
about the same size as in 2000 hardly speaks well for Italy’s progress under
the aegis of the EU.

There are many dimensions to the Italian
vote. I would like to focus on the following.

1. Why did Renzi call for the referendum? By substantially reducing the size of the senate, it would be easier
for the executive to pass ‘austerity and neoliberal reforms’ through the
Chamber of Deputies. The changes would entail hastening the process of tax and
labor reform that would in effect weaken labor and transfer income from the
broader social classes to the banks and larger corporations. Italian banks
carry a disproportionate number of unserviceable loans – roughly one-third of
EU’s bad loans for an economy inexorably linked to the rest of the EU and
suffering a growing public debt.

Because the investment in Italian banks
goes beyond the country’s borders, the banking crisis poses a major risk to
financial stability in the EU unless reforms are enacted that would in essence
transfer funds to strengthen the banks at the expense of the social welfare
state and the working class. The insolvency of the Italian banking system will
drag down with it the EU banking system under the ‘contagion syndrome’ that
links the EU financial system, unless Germany permits the EU to inject billions
to save the banks thus further driving down the value of the euro.

2. Why were public opinion polls wrong as they were in
the case of the UK referendum and the US presidential election? By now people across the entire Western World cannot take seriously
public opinion polls because in 2016 in three different countries the corporate
media has been wrong about election results. First, the case of BREXIT clearly
showed that public opinion polls were either manufactured or the polling
companies deliberately preselected a targeted audience for their questionnaires,
so that they could achieve the desired result and influence the undecided
voters to join the fictitious majority. More or less the exact same thing took
place in the US, although one could argue that Clinton won the popular vote and
still lost the Electoral College.

Italy represents the third case in 2016
where public opinion polls were wrong leaving people to wonder if this was part
of a pattern reflecting the interests of corporations backing a certain
politician, political party or policy. It is one thing for polls to be off by
the typical margin of error (3 to 5%) and another to be completely off the
charts as in the case of BREXIT, USA, and Italy. If indeed they conducted
honest polling, then one would think that they would be reconsidering the flawed
method of research. However, it is hardly coincidence that corporate public
opinion polls are not intended to reflect how people will vote but to influence
the result. In short, polls have lost credibility as much as the biased
corporate media that will go to great lengths to mold public opinion in support
of neoliberal and corporate welfare policies as the panacea for the masses.

3. Was the Italian referendum a ‘personal issue’ and ‘insignificant’
as many European officials and corporate CEO’s contended? There were also those who argued that the vote reflected societal shifts
within the country about national sovereignty and the EU’s role in hindering
growth and development. It was amazing to watch various European TV programs where
Italian and European corporate representatives and EU officials argued that the
vote meant essentially nothing and ‘reforms’ (anti-labor, neoliberal and
corporate welfare) must continue as though the peoples’ vote was a futile
exercise. Some argued that Italians did not vote to leave the EU as did their
British counterparts in summer 2016.

Others insisted that the vote was
meaningless because it was all about personalities, namely Renzi vs. Giuseppe
“Beppe” Grillo of the Five Star Movement and Silvio Berlusconi representing the
populist right wing. Still others noted that this vote simply meant a more
flexible policy toward the Italian banks by the European Central Bank. Some
noted that the vote is not as serious because populists on the center left led
by Beppe Grillo could never come together with the rightist populists of the
Northern League. Therefore, the era of coalition government in Italy simply
means a weak state that permits neoliberal and corporate welfare policies to
prevail.

4. Did the Italian referendum weaken the EU and the
neoliberal and globalization course or was it a brief pause until the
establishment political forces with the backing of big capital mobilize for a
new strategy of co-opting both the League of the North and the Five Star
Movement? Russian politicians hailed the vote
in Italy’s referendum as a blow to EU unity, but that may have been wishful
thinking because the blow was not to the head of the EU integration model.
Nevertheless, no matter how much lipstick and makeup EU apologists of
globalization and neoliberal policies try to apply on this little pig, it is
still a pig and voters across Europe see it as such. This is the reason that a
percentage of them turned to populism on the right or the left, leaving an
increasingly weaker centrist arena to become more right wing by embracing
xenophobia and racism. In short, this is not just a matter of the banking
crisis but a crisis in bourgeois democracy.

5. Do the Italian referendum, the US election of
Trump, and UK exodus from the EU indicate a rising tide of right wing populism
undermining globalization and neoliberal policies? It is indeed possible that we could see increased support for
economic nationalist measures across the EU if the US goes that route as Trump
has indicated. However, the structural course of globalization, neoliberal
policies and corporate welfare are so deeply grounded in the political economy
that it will be very difficult to reverse course. The symbolism of right wing
populism is actually more important in so far as periphery EU countries may opt
to follow this path that Trump and Putin hail as the new trend. Because the
structure of the economy will remain essentially the same in the near term,
living standards for workers and middle class will not improve and people will
keep moving away from the centrist parties and toward the left or the
xenophobic right, a phenomenon not just in Italy but across Europe.

As long as the EU represented the
possibility of higher living standards and a higher quality life, people
regarded integration in appositive light. Once the evidence began to show very
clearly that the EU was a mechanism for the hegemony of big capital at the
expense of the rest of society, the EU’s appeal began to decline. This
manifested itself in right wing populism and ultra-nationalism across the
continent, especially in Eastern Europe but also in France and Great Britain.
Although Communist and non-Communist leftist political parties have expressed
adamant opposition to globalization, neoliberal policies, and the patron-client
integration model, political momentum rests with the right wing that has been
riding the populist wave across Europe.

Imminent Demise or Temporary Setback for the EU?

Contrary to many analysts warning of Italy
sending the EU into chaos if it voted against Renzi’s proposed reforms, Italy’s
prospects after the vote are about the same after the referendum as before.
Considering that the banking crisis of Italy can be dealt within the EU by an
injection of both European Central Bank and Italian government capital combined
with private and consortium investment, stability is possible although at a heavy
cost to taxpayers. Moreover, despite the referendum, neoliberal and corporate
welfare policies at the expense of social welfare will continue in Italy as
they have in Greece, Spain, Portugal and much of the EU since 2010.

Given the relative absence of inflation in
the EU, and the European Central Bank’s projection that inflation will rise from
0.5% in 2016 to just under 2% by the end of the decade, the policy of
monetarism (keeping a strong currency by tightly controlling the money supply)
has been responsible for capital concentration, low jobs-creation climate, and
income redistribution from the middle class and workers to the top ten percent
of the wealthiest individuals across Europe.

Speculation by many academics, journalists,
stock market analysts, and politicians that the EU is on its deathbed seems
motivated more by ideological and political factors in some instances or trying
to influence securities speculation in other cases. In most instances, people
simply analyze headlines circulating around the mainstream media. This is not
to suggest that the EU is not at its nadir since the Treaty of Rome in 1957,
not that the EU is more stable after the Italian referendum than before.
However, it is one thing to argue that the EU is indeed suffering a crisis, and
it is entirely another matter to underestimate its resiliency because of hasty
analysis or because analysts are paid by firms speculating on the euro and/or
bonds and stocks, or for ideological and political reasons.

Contrary to alarmist rhetoric from people
in different ideological camps, as the world’s wealthiest economic bloc with
NATO backing up its political and economic global reach, the EU is not in
imminent danger of disintegration. Despite setbacks it suffered in 2016 with
the United Kingdom leaving, Italy in serious banking and public debt crisis,
and Greece remaining in permanent austerity mode after six years of EU-IMF
measures that have only made the economy much worse than it has been at any
time in its post-military Junta era (1974-present), the EU can revive assuming
Germany and France modify the patron-client model of integration and dilute
corporate welfare and neoliberal policies that have wrecked the economies and
undermined bourgeois democracy.

BREXIT was indeed a major blow to the
regional economic bloc, but the UK was never part of the euro-zone and its
economic role will continue with some modest modifications that will result in
higher indirect taxes for the consumers. Considering the performance of the
stock markets across Europe, including England since BREXIT, the alarmist
rhetoric about UK leaving the EU now appears overblown and indeed politically
motivated to persuade UK voters to stay. Not just biased media reporting, but
biased public opinion polls proved that big capital was determine to go to
great lengths in support of maintaining the integrity of the bloc. The barrage
of EU threats against Britain were also revealing about the lengths to which
big capital and its political backers will go to oppose any model of economic
nationalism, even if that model continues with aspects of neoliberal and
corporate welfare policies.

The Italian referendum was a major setback
for multinational corporations, banks and neoliberal-corporate welfare
advocates. However, it is a stretch to argue it signals the beginning of the
end for the EU. The doomsday rhetoric about the consequences did not materialize
immediately as the pro-EU forces claimed and the European Central Bank as well
as central banks of individual member nations is prepared to support the
regional bloc with injections of capital.

Because Italy’s banks need time to
recapitalize and Moody’s rating agency changed Italy’s outlook from stable to
negative, short-term stock and bond speculators influence the entire political
landscape about EU’s dim prospects when combined with the reality of a rising
anti-EU right wing xenophobic tide across Europe. The current ECB 80 billion
euro a month of bond purchases continued until March 2017 and scaled back to 60
billion until December 2017 is intended to stimulate growth in a sluggish regional
economy. Monetary policy is a major tool
that keeps the regional bloc viable. Considering the modest GDP growth of the
core members of the EU, combined with the stronger than expected revival of
China’s economy in the second half of 2016, the world’s largest trading bloc
will remain strong but still wobbly in the next five years.

Neither BREXIT nor Italy referendum will
bring down the EU, but the glaring contradictions within the regional bloc will.
One such contradiction is that members share a common currency and each member
government must abide by certain fiscal policy restrictions despite the obvious
uneven structure of the region’s economies. It defies rudimentary logic that import-dependent
southern and Eastern EU members share the same hard currency as Germany that is
a major industrial power on a world scale. This contradiction points to further
problems that will only become worse under the current patron-client
imperialist model which further strengthens the strongest members at the
expense of the weaker ones.

Europe’s ‘periphery economies’ (Southern
and Eastern Europe) cannot sustain long-term growth and be regionally or
globally competitive under a hard currency, fiscal and trade restraints imposed
by the EU intended to continue with neoliberal policies, and an integration
model designed to strengthen the strongest members at the expense of the weaker
ones. Nevertheless, the large companies and capitalists in the regional
economies share common interests with their northwest EU counterparts and they
enjoy considerable political influence in their respective countries’ political
decision to stay in the EU.

Besides the scenarios under which the EU
will dissolve revolve around the inescapable contradictions of the regional
bloc, as I noted above, there is also the political decision of the larger
members to end the bloc under pressure from national elites advocating greater
national control of the economy and society. Unless Germany and France as the
largest members and pillars of the bloc since the 1950s decide that it is time
to end integration because their national economies would be better off, the EU
will continue to exist until the next global recession.

Even if the EU dissolves after domestic
and regional political and economic pressures because it will cease to serve
the majority of the people, a new integration model of European trade-financial
realignment will replace the existing one. Geography cannot change any more for
Europe than for the Western Hemisphere. For the near future, there will be some
policy modifications at the national level and by EU at the central level in
Brussels to accommodate the rising tide of right wing populism and critics from
the left demanding to save the social welfare state. It is inevitable that the
pro-EU political parties would be able to mobilize support and win elections
because they will move closer to the positions of their right wing populist
political opponents.

Alarmist rhetoric is in long supply by
political element on the extreme right because they espouse nationalism inseparable
from xenophobia and racism. They see EU integration compromising their national
sovereignty and they use the migration issue as a fear mongering tactic. Encouraged
by the rising xenophobia amid the wave of Middle Eastern and North African
migrants, Marine Le Pen of the French National Front and other
ultra-nationalists across Europe has been riding the wave of anti-EU populism
but with limited success as the elections in Austria showed in December 2016.
The containment of the far right is partly due to the conservative parties
adopting some of the right wing rhetoric and espousing the platform of the far
right, especially talking tough about migrants, blaming largely non-white,
non-Christian immigrants for all the problems facing the white Christian
continent.

The transition from the EU inter-dependent
model of integration to a patron-client imperialist model that Germany espouses
will eventually precipitate the downfall of the EU from within as the regional
bloc is the cause for massive wealth concentration and increased social and
geographic inequality. Considering the widening gap between the few wealthy and
the increasingly squeezed middle class and workers, there will be more social
and political instability forcing people to choose between the populist right
wing political camp and the varieties of center-left and left political
parties.

There are many positive elements about
European society that enrich it and make it unique in the entire world and permit
it to make worthy contributions to its citizens and to the world. Those include
the absence of capital punishment and respect for human rights, openness to
global cultural influences, diversity of newspapers and political parties
representing the entire political/ideological spectrum from the far right to
the far left, identity with the nation-state and the EU, to mention just a few
things that make EU members more democratic than many other advanced nations,
including the US where authoritarianism has become mainstream and not just
because of Trump who only reflected prevailing trends and took advantage of
them to secure election to the presidency.

There are also very dreadful elements of
European policies. Those include the expansion of NATO and huge defense budgets
in the post-Cold War era intended to carry out direct and covert military
campaigns with the US as the senior partner under the pretext of ‘the war on
terrorism’. The direct consequence of such militaristic policies have been
jihadist attacks on innocent people in European cities, which in turn has
entailed a sharp rise in Islamophobia and xenophobia as the platforms of
conservative and extreme right wing political parties. These scapegoat issues
distract from the core ones that concern the integration model and social order
responsible for the downward mobility in Italy and the periphery member
nations.

Naturally, the mainstream media and
politicians reinforce xenophobia by the manner they cover related issues, thus
contributing to public distraction from the core issues. Given the current
economic, and sociopolitical trends, Europe will find itself at some point in
the not too distant future in the same course toward authoritarianism as the
US. In a continent that has experienced Nazism, Fascism, and varieties of
authoritarian regimes in the last century the signs are evident that indeed
history is not a steady Hegelian line of progress but one of regression that
reflects the irrational in human nature.

Wednesday, 9 November 2016

Right wing political groups throughout the world are celebrating
Trump’s victory but rather prematurely. They traditional conservatives and liberals
are sufficiently delusional to believe that they are somehow far removed from
Trump-style authoritarian politics when in fact they laid the groundwork for
Trump to succeed. Meanwhile, some traditional conservative political leaders
around the world are wondering if right wing populism flirting with Fascism is
the way to political victory, never questioning if their policies drove people
to the far right. Others are questioning if BREXIT and the Trump victory really
mean popular discontent with globalization under the neoliberal development
model. Many analysts are already decrying the rightwing course of the American
electorate, as though Clinton was a New Deal Democrat rather than a Rockefeller
Republican with a more pro-Wall Street and more hawkish foreign policy than
Trump.

Political correctness aside, the US was already a
quasi-police state before Trump under both Bush and Obama. Therefore, the socio-cultural-political
landscape was fertile for the new populist Republican leader, especially
considering the corruption scandals that plagued Clinton. It is not at all the
case as many have argued that US democracy suddenly became bankrupt because of
Trump’s victory, because this was the case throughout history, with some
exceptions when reformism became necessary to strengthen capitalism under the
pluralistic society as during the Progressive Era and New Deal.

Behind the new authoritarian figure that will become
America’s president, and behind the Republican victory of both houses of
congress, the real power is corporate America as it always has been. Wall
Street, not Washington, will determine policy under Trump who promised economic
nationalism vs. globalization, isolationism vs. interventionism, job-growth
oriented economy vs. jobs export oriented economy. Mainstream politicians, the
media, and the entire institutional establishment have always projected the
image that elections are equated with democracy.

The establishment wants people to believe that the electoral
process affords legitimacy to the social contract. No matter how manipulated by
the political class, financial elites and the media, elections put a stamp of
legitimacy on what people believe constitutes popular sovereignty. As shocking
as it was for many across the US and around the world, a Trump victory
represents the illusion of democracy at work in a country where voter apathy is
very high in comparison with most developed countries - the US ranks 27th
in the world below Mexico and Slovakia in voter participation.

Besides the illusion of popular sovereignty, elections
inject a sense of hope for a new start in society – the eternal spring of
politics intended to maintain the status quo. An even clearer picture emerges
regarding the distasteful “steak or fish” choices, as President Obama alluded
during the correspondents’ dinner a few weeks before the election to indicate
with pride that there is no third political choice. The larger problem is the
lack of differences between ‘steak and fish’ (Democrats and Republicans) in
every policy domain, except social, cultural/lifestyle issues.

Of course, the very high percentage of ‘negatives’ for
both presidential candidates and the absence of alternatives other than those
that the political and financial establishment chose for people to give their
final approval reveals that people were voting for what each side deemed the
‘lesser of two evils’ – the ‘steak or fish’ choice that the establishment
places on the menu and then the media ‘guides’ voters to choose one over the
other as though it really makes much difference. This is hardly a manifestation
of democracy and a testament of a system far removed from popular sovereignty.

Unlike elections in many developed countries, American
elections have an aura of finality about them. It is as though everything has been
decided at the ballot box until the next election cycle and people must conform.
Elections invalidate expression of dissident voices, but not for corporate lobbyists
influencing legislation. Despite the aura of finality and the historic election
of populist Republican supporting economic nationalism, after the presidential
election the US remains more bitterly divided than it was during the last years
of the Vietnam War under President Nixon; certainly more undemocratic because
of the ubiquitous surveillance state and Homeland Security regime that is here
to stay. Although these divisions are not expressed as part of a class
struggle, given the absence of working class solidarity, they find expression
in varieties of smaller social, religious and cultural groups at odds with each
other.

This is not to suggest that the US is as authoritarian
as other countries claiming to be democratic. Nevertheless, there is
considerable underlying sociopolitical polarization in a country hardly
democratic as its apologists insist. Because of factionalism
(socio-cultural-religious conservatives, isolationists/anti-globalist
libertarians, traditional fiscal conservatives), Republican infighting will
invariably manifest itself when the executive branch tries to push measures
that congress will reject because corporate lobbyists oppose them. Animosity within
the Republican Party and between the two major parties in congress will result
in more gridlock despite a sweeping Republican victory of all branches of
government. This is what Wall Street wants. Gridlock projects the image that
both sides are fighting for the interests of the people when they are really fighting
on behalf of corporate interests. Nevertheless, they present the process as the
essence of democracy and the media reinforces that view.

Trump’s quasi-Fascist America will be unacceptable to
many Democrats who believed that pluralism and multiculturalism in a country
with changing demographics must become a reality with a first female president symbolizing
these changes. On the other hand, Trump voters will be very disappointed once
reality sinks in that the flamboyant charlatan billionaires cannot deliver in
the promise to make America great again in terms of raising living standards. Trump
had raised expectations so high that he the first to be disappointed will be
his own voters. However, he will deliver on the implied promise to take America
back a few decades when white male supremacy was rarely questioned at home or
abroad.

Just days before the election, a FOX NEWS poll of its
own audience indicated far greater pessimism about the country’s future than
the general population. These people also fear deepening division in the
country because the liberal establishment is an anathema to their cultural
identity. With a Trump victory, the Republican popular base watching FOX NEWS
will be hoping that their right wing messiah will lead them to the promised
land of the early Cold War of the 1950s and to the elusive American Dream of
yesteryear. Disillusionment has already set it on the part of many on the
progressive wing of the Democratic Party who see their dream of greater social
justice far removed.

Regardless of Trump’s promises to improve the lives of
the poor and the middle class by bringing jobs back home, the only certainty is
the hegemony of markets over the state resulting in continued political
polarization in society that has turned sharply to the right even more than it
was under Reagan AND Bush-Cheney. Globalization and neoliberal policies (the model
based on state empowering the private sector in every domain and incentivizing
it through fiscal policy and subsidies) will continue no matter what Trump
promised/threatened, and that will result in further capital concentration and
downward pressure on middle class living standards and sociopolitical polarization
will become more evident.

Parading the confederate flag and a hunting rifle, the
Trump voter will continue to feel one with the apartheid culture of the past. Trump’s
supporters will feel marginalized and will become more fanatical. By contrast,
the Clinton voter supporting trans-gender rights and the woman’s right to
choose will be optimistic that the time has come for pluralism to expand the
all-inclusive socio-cultural net. By the end of Trump’s first hundred days,
neither the Trump nor Clinton voter will see much evidence to celebrate a
future rise in living standards.

Many academic economists, private investment firms, the
IMF, the World Bank, and OECD estimate that low growth will be accompanied by market
concentration and jobs exported to cheap labor markets, keeping American wages
low in the coming years. The average median net worth of Americans ranks lower
than 18 other nations and dropping as personal debt is rising. Misplaced optimism
on the part of Republicans will soon be replaced with pessimism almost as
intense as that of the Democrat voter.

Campaign promises to raise living standards have been
made by every presidential candidate in the last four decades. Living standards
have been declining and they will continue on that trajectory according to all
studies on future economic prospects. Considering the low-growth global
economic environment, the high US debt under a system that encourages more
capital concentration and export of high paying jobs, no one expects inflation
adjusted improvement in living standards during the next four years. Moreover,
the low interest rates, which stimulated some very modest growth since the
recession of 2008, are ending. The absence of monetary stimulus will further
impact middle class credit and the consumer-driven economy.

Contrary to appearances, Trump will be limited in what
measures he can pass through congress that relies heavily on wealthy donors and
lobbyists for campaign finance.

The executive branch will be weaker than it was
when Obama succeeded an unpopular president in 2008 amid a deep recession and
US military intervention. The legislative branch will be more aggressive toward
the executive branch than it was under Obama. The result will be greater
political division that only helps corporate America. The share of the economic
pie for the middle class and workers will continue to shrink This in no small
measure because the sharp rise in the public debt will require higher indirect taxes,
cuts in entitlement programs, and higher interest rates to attract buyers for
US treasury bonds - presumably a risk free asset threatened by rising rapidly
rising debt levels undermining the dollar’s value.

Besides the structurally weak economy under neoliberal
policies and corporate welfare, several factors will lead to sharper political
division in the next four years. First, Republicans will be predictably hostile
to any Democrat policy proposal from background checks on guns to relief for
college debt aimed to further the Democratic Party’s popular base. Second, many
conservatives will use the Trump victory to rally popular support for an
extreme right wing agenda to keep the populist wing of the Republican Party
strong. Third, Trump already set the divisive tone by alienating every social
group in the country, but was well rewarded for it, thus reflecting the ideological,
political and cultural milieu of the American mainstream now entrenched on the
far right of the spectrum.

People who voted Trump will feel vindicated about
their attitudes toward women, minorities and foreigner from Latin America and
the Middle East. As their living standards decline, they will become more
fanatic. Their church leaders and local civic leaders along with right wing
talk radio and FOX NEWS will encourage right wing fanaticism because they all
have an ally in the White House. To appease the Republican voters, along with
local law enforcement, many in the military generally accepting of a police
state, President Trump will likely focus on an infrastructural development program
to create some new jobs. At the same time, he will strengthen defense while
fighting out with mainstream Republicans about rapprochement with Russia and
withdrawal from regime change foreign policies.

Co-optation of the Popular Base

For both political parties, the biggest challenge will
be to co-opt the masses while serving Wall Street and the defense/intelligence
industry establishment. The Democratic Party is indeed an umbrella that
includes elements ranging from Rockefeller Republicans especially suburban
women opposed right wing populism, to progressive social democrats and even some
espousing a form of socialism. As middle class living standards continue to decline,
in accordance with IMF predictions among others, the ability of the Democrat party
to remain a large umbrella will be diminished, especially after Clinton’s crushing
defeat.

Unless the Democrats revert back to FDR’s New Deal
politics of the 1930s, something that neoliberals and their wealthy donors adamantly
oppose as do Republicans, the party will have to choose between remaining in
the camp of Rockefeller Republicanism like Clinton, or abandon its neoliberal
commitments and move closer to the Bernie Sanders camp.

The election of 2016 proved that Republicans have
moved farther to the right than anyone could have predicted. Nevertheless,
divisions remain between traditional economic/fiscal conservatives, some Libertarians,
and populist socio-cultural-religious conservatives, including the Ku Klux Klan
that endorsed Trump. For now, Republicans have the luxury to ignore the changing
demographics – Hispanics and African-American voters along with younger voters.

No matter how charismatic the Republican or Democrat political
leader, it will not be easy to compensate for the growing chasm between rich
and poor. As much as ideology matters, in the end the Democrat voter cannot pay
her bills with LBGTQ bumper stickers any more than the Republican voter can do
so with the confederate flag. No matter the obfuscating political and media
rhetoric about disparate social groups transcending social class, socioeconomic
factors determine class as they always have. Both parties will try to
indoctrinate their voters to live by ideology alone, as churches convinced the
faithful masses that salvation of their soul was the only thing that matters.

Suppressing class struggle evident in all aspects of
society, the media will continue to propagate for class collaboration using
nationalism as the catalyst. Subservience to capital identified with the
national interests is a historically rooted belief that has remained in the
social consciousness as secular dogma and taught in schools as gospel truth. The
media perpetually delivers the message that if there is a problem in the
political economy the culprit is the political class, the elected official and not
the financial elites; certainly not capitalism as a system engendering
structural inequality.

Trump will be no different than politicians of both
parties that try to distract public opinion by directing attention away from
domestic issues to foreign enemies new and old alike; pursuing the dream of Pax
Americana despite its costs and limitations in a multi-polar world order where
East Asia plays a dominant global role. The only leverage of the US is to keep
Asia divided by demonizing China, as Trump has done repeatedly. Demonizing a
foreign enemy to distract from focusing on domestic problems worked during the
Cold War to engender sociopolitical conformity amid the triumph of Pax
Americana. In the absence of a Communist bloc, the counter-terrorism ideology that
replaced anti-Communism will be intensified under a Trump administration
because it is in the interest of the defense industries.

As we have seen since 9/11, there are limits and
monetary and political costs to the counter-terrorism, considering that US
policy and practices actually contribute to the growth of terrorism not its
elimination. Even the most gullible right wing Trump fanatics realize that
polluted water in Flint Michigan has nothing to do with ISIS, and everything to
do with the massive tax breaks of the state’s Republican governor to
corporations and the rich of that state. Similarly, people are aware that after
several trillion dollars spent in Middle East wars and counter-terrorism, the
US public debt has risen sharply and the economy weakened.

Sociopolitical Polarization under
Corporatocracy

Even for the apathetic masses that do not bother with
elections, the magic of the ballot box affords the illusion that people have a
voice in the political arena. Politicians, pundits and the media remind the
public that they have only themselves to blame for their elected officials.
They rarely mention rich donors behind the political class that decides who runs
for elected office. The realization that people’s prospects are not improving,
that their children are not experiencing upward socioeconomic mobility, and policy
works to benefit a small segment of society drives some to the extreme right
and others to the left.

The weakened center that Democrats claimed to represent
in fact causes more people to rebel from the right because it is socially and
ideologically acceptable as it has deep historical roots going back to the
Civil War. Trump’s victory offers ample proof of this reality. By contrast, the
US, unlike many countries around the world, has no historical tradition of sustained
strong left wing politics, and see right through the hollow liberal rhetoric behind
which is Wall Street financial interests.

Just beneath the thin veil of conformity that the
media, politicians and mainstream institutions promote, there is lingering
sociopolitical polarization that will become more pronounced now that Trump is
elected and legitimized neo-Fascism in America. The mainstream media actually
reinforces sociopolitical polarization mainly caused by structural conditions
in the economy and a political system representing corporatocracy (rule by the
corporations). FOX News, right wing talk radio, among others advocates a more
authoritarian/militarist/police state course for society. The rest of the media
presents itself as ‘objective’ propagates for the façade of a pluralistic
society that permits cultural diversity, but it is as committed to corporatocracy
as the right wing. In short, corporatocracy led to the election of a populist
Republican who is as close to an authoritarian leader and open to Fascism as
any in the past.

Regardless of whether it supported Republican or
Democrat candidates, the mainstream media in search of the culprit for the public debt is critical of social
security, subsidized housing and health care for the lower strata of society,
school lunches, and social programs. At the same time, the media echoes Wall
Street in blaming government for the conditions of poverty that the political
economy creates. Trump’s ‘drain the swamp’ slogan referring to
Washington never mentioned the source of the swamp which is Wall Street and its
lobbyists. Therefore, the media never
blames corporatocracy but the elected officials serving it in order to preserve
the system. By embracing the authoritarian Republican leader, the majority
voters are revealing that they see greater hope for their future under such a
regime that promises to fight corporatocracy than they do under a Democrat
leader linked to Wall Street.

Political Co-optation Strategy

In their struggle to broaden their popular base, aspects
of Bonapartism, the political strategy of projecting the impression of rising above
classes, have been embraced by both political parties, especially the
Republicans. Unless the political parties representing capital co-opt the
disillusioned middle class and working class elements; unless they give them an
outlet to express their disapproval with a political economy favoring the rich;
unless they give them hope that the system works for them, then bourgeois
democracy collapses and a form of authoritarianism ensues. This is already a
reality in Trump’s America.

A precursor to Fascism in Europe, Bonapartism would not be possible unless all mainstream
institutions and not just the political parties and media contributed to the
promotion of institutional conformity. Although a segment of the population
sees past such efforts at conformity and supports the reformist candidates –
Bernie Sanders in 2016 - invariably those candidates are co-opted by the
mainstream and bring along the masses. This was the case with Senator Sanders
who managed to lead a grass roots movement only to deliver it in the hands of
the Wall Street candidate, as Sanders described Clinton.

Partly because of the Sanders candidacy, Clinton succeeded
to some degree in co-opting the progressive elements of the left into the
Democrat Party. A continuation of the defunct Tea Party behind which was energy
corporations and right wing billionaires, Trump’s populist ‘revenge anti-establishment
politics’ was even more successful in co-opting the masses that the Democrats.
While the Democrats efforts focused on de-radicalizing the progressive elements
by securing loyalty of their leaders into the mainstream, Republican efforts
focused on driving them even farther toward fanaticism as an expression of dissatisfaction
with the Democrat status quo that implicitly castigated the corporate elites.

Co-optation of the masses by Republicans necessarily
entailed a populist appeal to social/cultural conservatives, mostly angry
whites who feel besieged by demographic and structural economic changes in
society. Instead of analyzing the root causes of structural inequality built
into the system, Trump backers blame other social groups, but refused to
criticize the political economy because it is unpatriotic to question
capitalism. They believe that if all minorities somehow disappeared and no
immigrants ever entered the land, then their social and economic problems would
disappear as well and their status would magically flourish.

Because of demographic changes and downward income
pressures, the traditional Republican appeal confined only to fiscal/economic,
and defense-security conservatives is no longer sufficient to elect a president.
Revenge politics of extreme right wing populism was more the message of the
Trump team promising to clean up Washington, to distance itself from the UN,
dilute NATO, exit from international trade agreements or re-negotiate them, and
discipline corporations while first incentivizing them so they do not take jobs
into cheap labor markets overseas.

Disgruntled social/cultural conservatives liked
Trump’s vitriolic rhetoric against the political and economic establishment,
against minorities, Muslims, and women. His emotional appeal similar to that of
the Nazi Party (‘give people someone to hate’) worked because Republican right
wing populism has deep roots and offers hope for reverting to a
racist/sexist/xenophobic America of the past instead of the one that exists now
under current demographic and economic conditions.

The irony is that Obama’s America operated under a
regime many would justifiably label quasi-police state and institutionalized racism
was evident despite an African-American president. Police officers were shooting
unarmed black males and a criminal justice system reflecting institutional
racism not so far off what Trump and many of followers openly or covertly
advocate as a reaction to political correctness and equal opportunity
institutional access (affirmative action).

Weak Executive Branch, Strong Wall
Street

Wall Street pharmaceuticals and defense-related stocks
celebrated with a sharp rise to welcome a Trump victory. However, a weak
executive branch is inevitable under the new president, but it should not be
confused with a weak governmental structure typically characteristic of
developing nations. In much of Africa, and parts of Latin America and Asia,
states are unable to raise taxes and deliver basic services to their citizens.
Although the state structure in the US is hardly like that of developing
nations, there are signs that it is weakening at the expense of the masses
under the neoliberal regime Trump will follow no matter his hyperbolic rhetoric
against globalization. The only certainty about the US election outcome is
policy continuity, which is what the markets want, regardless of a president-elected
who mobilized popular support by appealing to racism, xenophobia, sexism and
authoritarian style politics.

To maintain corporate hegemony over the state, Wall
Street and the media it owns can only prevail if the legislative branch is
compliant and checks the powers of the executive that may dilute corporate
welfare policies in order to maintain the social order by providing certain basic
social programs from affordable health care and social security to affordable
education. One glaring contradiction of the political economy is that people
must be convinced that their interest is inevitably linked to the fortunes of
big capital and not contrary to it; that big capital is not responsible for
declining living standards for America’s middle class and workers in the last
forty years; and that the enemy is the politician.

The media helps to keep the focus on the politician (establishment
political class of both parties) as the evil force behind the calamities that
befall society; never on the capitalists on whose behalf the politician
conducts policy. The media will always examine tantalizing stories of all sorts
about the personal lives of politicians, stories that deserve attention because
they reflect integrity of character. However, the media never examines the
politician as a servant of big capital and the massive influence of corporate
lobbies in determining legislation. The media will never cover social justice
issues, because they lead back to the structural inequality built into the
political economy. In other words, the business of perpetual mass
indoctrination and distraction is essential to keep the majority under the
illusion that they live in a democracy – rule by the people - when in fact it
is Corporatocracy. In
winning the presidential election, Trump gave the illusion to his followers
that they have hope for structural change.

Culture wars and personality conflicts as distraction
from social justice issues will remain front and center to distract people from
focusing on the root causes of downward social mobility. While market hegemony
is a reality of the nexus between state and capital, the media and politicians
have convinced people into believing in the illusion of choice – ‘the future is
in your hands’ and ‘the people have spoken’, as media headline read. The
question for capitalists who were divided between Clinton and Trump is how to
manage the economy and what role the state must play against the background of
intense global competition and shifting balance of power from the West to the
Far East. This is not to minimize the intense political rivalry, the
partisanship of law enforcement and other institutions at all levels of
government, or the ongoing struggle for policy influence.

CONCLUSIONS: Revolt of the Extreme Right

Trump’s victory temporarily
sets into hibernation the majority popular base of the Republican Party while
emboldening its more extreme right wing elements. There is nothing like the
illusion of identifying with a political victory to appease those feeling
marginalized among the lower layers of the social pyramid. Once it becomes
evident that domestic conditions will continue as they have in the recent past,
contrary to Trump’s lofty promises to the middle class and working families, disillusioned
voters will have to be content with the Republican cultural agenda, strong law
and order position, and strong defense policy. Republicans are more likely to support
leaders advocating greater reliance on militarism and police state methods and
less tolerance for dissent. The elements for an authoritarian society are
already deeply rooted in the culture and will eventually come into the
forefront more pronounced than ever.

Ironically, both Republican
and Democrats are responsible for the underlying causes of a revolt by the
masses rallying around a right wing demagogue appearing to be in a struggle
against the establishment. Judging by the performance of the US stick market,
the establishment knows he represents Wall Street and not the unemployed worker
in Cleveland. The media has convinced the average American that it is anathema,
un-American to rebel from the left against the unjust system but patriotic to
do so from the right. With the exception of the Klan label, there is no stigma
attached to rebelling from the right against the establishment which includes
not just Washington but corporate America. The job of the right wing politician
will be to co-opt the popular base and keep it loyal to corporatocracy.

While the corporate media
sings the praises of globalization and subtly criticizes Trump’s economic
nationalism, it can only carry that message up to a point without appearing
unpatriotic. The dilemma for the corporate elites is not to be caught in
contradictory messages when trying to rally support of the masses, something
that has become exceedingly difficult because of the downward socioeconomic
mobilization. This is where it becomes convenient to blame politicians, and to
keep the executive branch weak and government divided so that people blame
everything on politicians who are actually in gridlock in the first place
because they differ about which segment of the economy and which corporations
benefit more than others as a result of policy.

Political campaign promises
are like happy endings in children’s novels. People enjoy reading and dreaming
about such things but they do not really expect that everyone lives happily
ever after.The
lives of the vast majority of Americans will not improve no matter who had won the
White House in 2016. Symbolically and not just because she is a woman, but also
in terms of engendering greater social harmony among the disparate demographic
groups, Clinton was better suited for the sake of continuity from the Obama
administration. However, Trump will serve Wall Street and neoliberal policies
and globalization just as faithfully because corporate America will give him no
choice.

Because of objective domestic and international
conditions in the early 21st century, the middle class is on a
continuing downward slope that radicalizes people either on the right or the
left will realize cannot be fixed by populist right wingers or mainstream Democrats.
Hence polarization in society will continue and it will become much worse after
the next deep recession in the US because the political economy is increasingly
serving a much narrower social base than it has since the 1920s. Trump has
broken all political and ideological taboos about crossing the line from
traditional conservatism to flirting with Fascism. This is America’s political
future and it has been here for some time only to manifest itself more candidly
in Trump.

"A
gripping, passion-filled, and suspenseful tale of love, betrayal,
political and religious intrigue, this novel entices the reader’s
senses and intellect beyond conventions. Slaves to Gods and Demons
takes the reader through a roller coaster enthralling journey of
personal trials and triumphs of a family emerging vanquished and
destitute after World War II.

Narrated by a young boy, Morfeos, modeled after the Greco-Roman pagan
deity of sleep and dreams, the book reveals the soul of a people trying
to ascertain and assert their identity while rebuilding their lives and
recapturing the glory of a lost civilization.

Seeking liberation from restraints of time, social conventions, and
binding traditions, the deity of dreams provides the conformist and the
free-spirited characters in the novel with venues for redemption that
are mere paths toward illusions. Exploring the complexities of human
relationships shaped by priest and politician alike, the novel rests on
the central theme that life is invariably a series of illusions, some
of which are euphoric, most horrifying, all an integral part of daily
existence.

Striving for purpose amid life’s absurdities after the destruction of
western civilization in two global wars, the characters in Slaves to
Gods and Demons struggle between holding on to the glory and grandeur of
a pagan legacy and the Christian present shaped by contemporary
secular events in Western Civilization."